Addressing threats to health care's core values, especially those stemming from concentration and abuse of power. Advocating for accountability, integrity, transparency, honesty and ethics in leadership and governance of health care.

Friday, October 18, 2013

Our latest example of the interchangeability of top insiders within corporate health care and the government agencies that are supposed to regulate corporate health care comes via an announcement from Johnson and Johnson,

Johnson & Johnson (NYSE: JNJ) announced today that Mark B. McClellan, M.D., Ph.D., Senior Fellow in Economic Studies, and Director of the Initiative on Value and Innovation in Health Care, Brookings Institution, will join the Board of Directors on October 15, 2013. Dr. McClellan will serve on the Regulatory, Compliance & Government Affairs Committee and the Science, Technology & Sustainability Committee of the Board.

As former commissioner of the U.S. Food and Drug Administration (FDA) from 2002 to 2004, and as the former administrator of the Centers for Medicare & Medicaid Services for the U.S. Department of Health and Human Services
from 2004 to 2006, Dr. McClellan has more than two decades of public
service and academic research experience. From 2001 to 2002, he served
as a member of the President's Council of Economic Advisers and senior director for health care policy at the White House. During President William J. Clinton's administration, Dr. McClellan held the position of deputy assistant secretary of the Treasury for economic policy.

So Dr McClellan has gone from running the US Food and Drug Administration, the primary government regulator of the pharmaceutical industry, to stewardship of one of the biggest pharmaceutical (and biotechnology and device) companies.

Not noted in that announcement was that Dr McClellan has been collecting positions in health care corporations since at least 2009. The examples I found included in chronological order:

2009 - General Atlantic LLC

This appears to be a private equity firm which claims to be a "leading global investment firm."

Notably, I did not see anything in any of these firms' announcements about Dr McClellan or their biographies of him that noted his board or advisory committee positions with other firms.

Summary

Dr Mark McClellan rose through the ranks in the US executive branch ending with positions as FDA commissioner and administrator of the Center for Medicare and Medicaid Services (CMS) within the Department of Health and Human Services (DHHS). He served under two presidents, Clinton and George W Bush. Within 3 years of exiting DHHS, he picked up his first important commercial position, at General Atlantic LLC, and then added other positions with Capital Royalty, Castlight Health, AvivReit, and now the biggest of all, Johnson and Johnson. Meanwhile he apparently continues at the Brookings Institution. He must be one very busy man.

This case could be lumped with those of another former FDA commissioner and Secretary of Health and Human Services who ended up as a Director of Medtronic (see this post), another Secretary of DHHS who ended up on the boards of multiple health care corporations (see this post), a director of the National Institutes of Health (NIH) who became a Sanofi executive, etc, etc (see this post).

While some might argue whether his acquisition of a leading advisory position with a private equity firm three years after he left DHHS technically constituted a spin through the revolving door, Dr McClellan's cumulative acquisition of four more such positions within the following four years certainly demonstrates how our corporate dominated health care system and the government agencies which are supposed to be regulating it to assure the health and safety of patients, and the maintenance of the public health seem to be run by an interchangeable cast of insiders. We have asked before whether we can trust federal regulators to put patients' and the public's health first when they know they could easily become candidates for lucrative private positions in the companies they regulate, or which are affected by their regulations, presumably assuming they have not done too much during their time in government to offend the leaders of such companies.

We have noted that the system in which government and big corporations largely overlap in terms of their leadership and presumably goals is called corporatism. One can argue that such systems end up being run primarily for the benefit of corporate and government insiders.

Until we dispel the fog of corporatism that has spread over the
government that was once supposed to be of the people, by the people,
and for the people, expect no real health care reform, and expect
continuing rising costs, declining access, and worsening patient care.
Obviously, true health care reform would start with the government and
its officials putting patients' and the public's health first, way ahead
of the financial comfort of corporate leaders.

I would note that neither the currently controversial and now operational Affordable Care Act, nor any of its opponents schemes for alternatives addresses this issue.

5 comments:

Afraid
said...

Is it the revolving door or is it just the rich reward of healthcare? Can you blame the guy for working after his government position? No. Can you blame him for working in the field he knows, I think not. Can you blame him for taking the highest offers? No.Its the size of the offers that is bothersome to many. That is the real problem, and not one unique to healthcare.

Well Roy, he was a top dog at the FDA and CMS, not a lower level position. Sure, lots of academic docs who graduated to chairs or deans or vice deans could get that job. Your average academic doc? Probably doesn't qualify.

I'm not knocking you Roy, I'm just sayin, its not unnatural for senior folks to get senior jobs elsewhere even if it does seem like they are bumpkins to us.

Its kind of like -- can you blame the docs for letting administrators take over medicine? Maybe not so much, I mean after all the government required all this administration and the docs couldn't get around to it.

Given the circumstances, can you blame the doc for doing what they can? Or the administrator from having the savvy to get a job paying more and leveraging it to pay for his kid's ever increasing college costs.

No, I don't think its really much different in most situations. People try to survive and do what they can given the rules imposed upon them by the system.

The powers that be control the rules, we don't.

Perhaps I'm a little more forgiving than normal, but really, aren't these the obvious results as we look at this in hindsight?

I do not blame Dr McClellan at least as much as I blame the current "system" and the incentives it provides.

Right now, the system provides no negative incentives for what could be considered unprofessional behavior, conflicts of interest, or even corruption.

Keep in mind that the Transparency International definition of corruption is abuse of entrusted power for private gain. The FDA Commissioner has considerable entrusted power that is meant to be used to assure the health and safety of patients and the public. It might be considered abuse of such power to make decisions to maximize the likelihood that one might be offered lucrative positions with the corporations that one is supposed to be regulating to ensure the public's health and safety, or with investment firms that invest in such corporations. Yet nothing in either the current law provides negative incentives for such abuse. And the FDA Commissioner is not required to sign a contract that prohibits future employment that might be viewed as conducive to such ethical corruption.

Of course, we don't know that Dr McClellan's actions as FDA Commissioner were affected by his consideration of such possible lucrative future employment. But his acceptance of such employment certainly suggests they might have been.

So do I blame Dr McClellan for grabbing lucrative positions because he could do so, and to heck with whether doing so would appear ethically questionable? - somewhat at least, because he is a doctor, and hence doing so probably could be questioned in the framework of professional ethics, even if it was not illegal or a violation of a contract.

By the way, though, I think your invocation of "people try to survive" is a red herring. I doubt that Dr McClellan would have faced poverty were he not to have accepted the positions listed above.

"No, I don't think its really much different in most situations. People try to survive and do what they can given the rules imposed upon them by the system." -- I mean really, I'm certainly not talking about most Docs or senior admin types here. I am just saying its natural for folks to try to get the most for themselves. Very few are altruistic and I really don't think we can depend on altruism as a strategy to fight corruption.

And certainly regulatory capture is a problem, a huge problem. I'd be willing to bet that landing a lucrative job in those you regulate is a thought for many regulators as they regulate and it influences their decisions, even if unconsciously.

It also takes the form of the regulated paying for the regulators as a fee or percentage. It seems like a good idea until you think that the more the regulators depend on the regulated for funds to run their departments, the more the conflict of interest. And its in the best interests of regulators to extend their reach as it helps job security etc.

The solution it seems is more simple, take the money out of healthcare, or out of defense, or TV, or whatever. Money draws thieves.

The other solution is for incremental taxes that make making a whole lot of money impossible. Of course the rich will just move elsewhere.

I don't pretend to have another solution short of maybe unionizing MDs (which sounds as possible as herding cats).

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